About this project

In 2012 the number of breweries operating in the U.S. surpassed pre-prohibition numbers. New Breweries now open on an almost daily basis.According to the Brewers association in 2013 304 breweries opened their doors and 20 closed down resulting in a failure rate of 6.6%.
That same year Subway was ranked the 3rd best franchise to own by Forbes magazine with a failure rate of 9.13%.Although independent breweries have been increasing by the hundreds per year, their sales pale in comparison to “Big Beer.” You know who we are talking about.

Craft Beer Sales in 2013 were about 7.8% of all the beer sales in the U.S.
Although Sales have improved there are many obstacles in the way of craft breweries, some governmental, some imposed by the larger breweries.
The largest obstacle is the three tier distribution system.

The Three-Tier system for distributing alcoholic beverages was set up in the United States after the repeal of prohibition. The three tiers comprise of producers, distributors, and retailers. The basic structure of the system is that producers can sell their products only to wholesale distributors who then sell to retailers, and only retailers may sell to consumers. Producers include brewers, wine makers, distillers and importers. Going through a distributor causes alcohol prices to be higher for the consumers while shrinking profits for the manufacturers. Many Distribution companies are swamped due to the high volume of new breweries, making it more difficult for breweries to get their product out. Most distribution companies are owned by “Big Beer” and therefore move those products first and foremost, even if it’s just to occupy shelf space to deny craft beer sales. These larger breweries can afford to lobby state governments to keep the Three Tier system on the books.

Self-Distribution is the practice of manufacturers selling directly to retailers and is becoming more and more prevalent.

New information released by the Brewers Association (BA) indicates that U.S. states with lenient self-distribution laws play host to more breweries per capita and produce more beer than states that ban the practice outright. According to a recent BA analysis, 33 states allow brewers to self-distribute their products and three states permit the practice in a limited capacity. The system (Three Tier) simply cannot handle so many brands.
Wholesalers, today usually just two per territory, cannot handle the number of SKUs and product complexity

-The local market is both your most important market and also the easiest to gain recognition and retail placements because of the “local appeal.” – ProBrewer.com

–“The challenge will be to accommodate consumers’ thirst for ultra-local, ultra-niche products within the system” – Marc Sorini – McDermott, Will and Emery

Opentapp will allow alcohol manufacturers who self-distribute to manage the distribution of their products. Bars and other retailers can download the app for free and order products offered by all self distributing manufacturers in the area in one place. Opentapp will also allow alcohol manufacturers and distributors to view current vacancies in restaurant/bar/retailer/distributor inventories and bid to fill these inventories. The App is designed to promote new beverage manufacturers and aid in distribution/self-distribution in a rapidly expanding alcoholic beverage market. This will also decrease lag times when filling taps in bars where rotating/seasonal taps are present. It is designed to supplement/replace the order sheets bars generally use and get beer to taps within same day or even in under a few hours. Distributors and self-distributors are able to gain new customers and break into new markets, while retailers will never have empty shelves/taps and be able to better vary their sales. This app will allow smaller breweries more opportunities distribute and pilot new beers and it will also give local breweries advantage over national or regional breweries.

Opentapp will allow manufacturers to create their own custom order sheets featuring their products. Retailers who are part of Opentapp can order alcohol through the app using these order sheets.

Opentapp will eventually expand to a premium version that will map out delivery routes and give manufacturers a load plan for their vehicles. Retailers will be able to order local products off a master product list comprised of all manufacturers willing to deliver to their location.

Risks and challenges

Opentapp has tackled most of its major hurdles on its way to becoming a fully functioning app. The application has a software patent and the name and logo for Opentapp has been trademarked. We have also worked with a software design company to design the artwork and functionality of the application. We just need funding for the creation of the application as well as advertising.

We were quoted for roughly $30,000 by the software design company to deliver the fully functioning application for the IPhone5s, 6, and 6s. We would also like to use additional funds to create an Android version as well as a functioning web app.

Our advertising campaign will start with social media, blogs, and forums. We plan on using the rest of the money raised by kickstarter to advertise on bar and nightclub owner association websites as well as the brewers association website and probrewer.com. There will also be a guerilla marketing campaign that will take place in Washington D.C.,which has no three tier distribution law making it the perfect city to launch Opentapp.

Because there are only 33 states where self distribution is allowed, Opentapp will use a portion of its proceeds to help lobby for self distribution across the entire country. We feel its our duty to help our fellow brewers succeed in getting their beers out to a thirsty public. Also the more states that allow self distribution, the more users Opentapp will have benefiting from our service.

If at some point all states grant self distribution, these proceeds will be donated to a charity voted on by Opentapp users on a yearly basis.